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The concept of value in marketing

 

 

We are currently in the process of putting together our own client feedback survey and it really made me question the concept of value and how marketing plays such a vital role in the perceived value that a company provides to its customers.  When considering whether a company provides value, it’s not just a question of monetary cost, it’s far more involved than that and the benefits derived from such value can be far reaching.

Digging out the old marketing theory text books, there are of course a plethora of definitions and theories surrounding value propositions.  However, the one that struck a chord with me most was by Fifield (2009):

Value = Benefits-Efforts-Risks-Price 

Interestingly the CIM (Chartered Institute of Marketing) changed their definition of marketing about two years ago ( they’d had the previous version for the past 30 years – “Marketing is an organisational function and a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organisation and its stakeholders.”

Regardless of what business you’re in, it will be based on some form of exchange between the seller and the customer and both parties will be exchanging something of relative worth.

Firstly, let’s look at the notion of ‘value’ and what that means.

Value 

  • A fair return or equivalent in goods, services or money for something
  • Relative worth, utility or importance: precise significance
  • Something intrinsically desirable

Perceived value

The biggest problem is that human beings are notoriously complicated beings and the perception of value can differ from one individual to the next.  This element of subjectivity is what marketing must try to alleviate – we need to be certain of who are target audience are, what they want and need, and how we can differentiate our value proposition from that of our competitors.  Our aim as marketers is to ensure that we provide strategies and tactics that are aligned with a business’ overall goals and that help deliver the best perceived value to customers. 

Benefits

You may be familiar with the term USP – unique selling proposition, however, I always advise clients to think more in terms of UCB – unique customer benefits.  Ideally, you want to pull your customers towards you rather than be a very pushy salesperson!

In order to engage with your target audience you need to be thinking about your product/service from their point of view and answer the fundamental question “What’s in it for me?” (WIFM) – what benefits are they looking for?

Be cautious of not merely listing product or service features but rather the benefits that the customer derives from having/using your product or service.

As humans, we are emotional and instinctive and we all have our own concept of what is of value to us.  Don’t try to second guess what it is that your target audience values – find out, ask them! Do your research and make sure you align your business’ value proposition to what your target audience want and need. 

Added Value

There is no denying that it’s a fiercely competitive world out there and, regardless of what business you’re in, it’s likely that you’re needing to constantly up your game and offer your customers ‘more’.  So how can you offer your customers more without bankrupting yourself?

Start by mapping out your customer’s journey with you and include all of the touch points that they have with your brand.  How can you improve their experience?  How can you improve the level of service you provide?

The aim is to offer your customers a combined product and service that they perceive to be superior to that offered by the competition.  It really is often a case of ‘the little things make the biggest difference’ and, if you can make your customers feel cared about and truly valued, you are likely to engage with them, make a connection and form a long-term relationship that results in repeat business and referrals. 

It helps to refer back to our earlier equation: Value = Benefits-Efforts-Risks-Price how can we demonstrate the benefits whilst minimising the perceived effort, risk and cost to our customers? 

Marketing isn’t just about generating sales in the short term, it’s about creating a strong brand and value proposition that ensures customer loyalty, referrals and long term success. 

If you need help ensuring that your marketing is providing and communicating value to your customers, then please get in touch – that’s our added value!